Wednesday, Aug 20 2014
• 10 a.m. (ET)

Prospects For Upward Mobility In America

Woven into the American fabric is the idea that anyone in this country can get ahead if he or she works hard enough. But research shows social mobility is much more fixed in the U.S. than in many other wealthy nations. Put simply, if you’re born poor in America, you’re likely to stay poor. There’s little disagreement among economists that social mobility has remained flat for decades. But there is debate over what to do about it. Democrats tend to believe government policy could do a lot to help those on the bottom move up. Traditional conservatives and Tea Party adherents have other ideas. A discussion about prospects for upward mobility in America.

Guests

David Leonhardt
editor of The Upshot, a New York Times website covering politics and policy; author of the e-book: “Here’s the Deal: How Washington Can Solve the Deficit and Spur Growth."

Scott Winship
Walter B. Wriston fellow at the Manhattan Institute for Policy Research; formerly research manager of the Economic Mobility Project of The Pew Charitable Trusts.

Richard Reeves
Brookings Institution fellow in Economic Studies and policy director for the Center on Children and Families whose research focuses on economic mobility.

Transcript

10:06:53

MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The United States is still viewed by many as a land of opportunity, a place where a child born into poverty can achieve great success through hard work and perseverance. But statistics show upward mobility has remained stagnant in the U.S. for decades. Joining me to talk about why Americans who are born poor tend to stay poor, and what to do about it: Richard Reeves of the Brookings Institution and David Leonhardt of The New York Times, joining us by phone from Maine, Scott Winship of the Manhattan Institute for Policy Research.

10:07:38

MS. DIANE REHMI'm sure many of you will want to weigh in. Call us on 800-433-8850. Send us an email to drshow@wamu.org. Follow us on Facebook or Twitter. Thank you all for joining us.

10:07:57

MR. DAVID LEONHARDTHello, Diane.

10:07:58

MR. RICHARD REEVESHello.

10:07:59

MR. SCOTT WINSHIPThanks for having me.

10:07:59

REHMGood to have you all. Richard Reeves, your new essay, "Horatio Alger: Equality, Opportunity, and the American Dream," which, by the way, we have a link to on our own website at drshow.org, give us a brief overview.

10:08:21

REEVESSo, Diane, America has a founding ideal of equal opportunity. I think it goes all the way back to the beginning of the nation, to the birth of the nation. The -- everybody has an equal chance to make it in life. And I think that's how America has historically managed to square the circle between the idea of individualism and individual liberty and the idea of natural equality. So we're all born equal, but we're also kind of fiercely kind of individualist society as well.

10:08:52

REEVESAnd so I think that actually that kind of reconciliation comes about through the American dream. Horatio Alger wrote about it famously in the 19th century. And it remains a very kind of strong part of American ideology. So that's the ideal. The problem is, as you've already mentioned in your introduction, the U.S. is falling a long way short of that ideal. So on most of the measures that you can use to look at this, rates of upward mobility, from the bottom in the U.S., are not very high.

10:09:20

REEVESYou have a four in 10 chance of being stuck in the bottom fifth if you're born there. They don't look very good by international comparisons. And they haven't gotten any better. So you've got this gap between the ideal and the reality. What do we do about that? Well, what I argue in the essay is the ideal is not going to go away. We can't abandon this ideal. So the challenge is to live up to it.

10:09:43

REHMWhat's happened in the past few decades? What's changed? It would seem that from the time of the end of the Second World War on, when you had the G.I. Bill in place, that that opportunity for rising up was indeed there. Did that make the difference?

10:10:12

REEVESSo I think what happened in the -- after the Second World War and the G.I. Bill and the great society is the economic growth was very strong in the U.S. And there were investments in education and infrastructure. So the vast majority of people were better off than their parents were, right? So there was a rising tide, and it lifted pretty much all of the boats. So we had this kind of prosperity machine of the three decades after the Second World War.

10:10:36

REEVESAnd then that sort of petered out in the 1970s. It slowed down. And then, of course, we've seen a recent recession. But it's important to distinguish between people being better off than their parents were, which is what happens when the economy grows, and people moving up and down the ladder. So we call the first absolute mobility, is that are we better off than our parents were? And the second is relative mobility, which is are we kind of moving up and down the income ladder?

10:10:58

REEVESIt's perfectly possible for pretty much everybody to be better off than their parents were but for not to have changed places. And I think that an intrinsic part of this ideal is not just about getting better off, everyone getting better off and economic growth. Important though that is, it's also about swapping places. It's about today's rich not giving birth to tomorrow's rich and today's poor not giving birth to tomorrow's poor.

10:11:20

REHMDavid Leonhardt, what about the terms social mobility and economic mobility? Are they interchangeable?

10:11:32

LEONHARDTI think they're not quite interchangeable, but they're very close. I think if you want to look at American class in this country and you were to take only one variable, like income or education, you would explain most of class. When you start to add additional variables, if you do income and education and profession, then you explain it better. But I think social mobility and economic mobility are pretty close in terms of terms.

10:11:54

LEONHARDTOne thing that Richard made me think about is that there have really been dueling trends over the last few decades, which is some things were better after the war, some things were worse. Right? In the 1950s and '60s, it was much worse to be a woman. It was much worse not to be white. It was much worse to be gay. And so those things have improved.

10:12:13

LEONHARDTBut, at the same time, we've had forces pushing in the other direction. We've had an increase in educational inequality. So if you're poor, it's now harder to keep up with the upper middle class. And these two things seem to have kind of canceled out. And that's why mobility has been roughly flat in this country and why it's as hard as it used to be to climb up from the bottom.

10:12:33

REHMScott Winship, has social mobility, in your view, declined in recent decades?

10:12:42

WINSHIPAll of the evidence suggests it has not. And I think David mentioned that at the very end, and that's absolutely right. I think even the evidence on educational mobility doesn't really point to a strong decline in mobility. So I think what you had earlier in the 20th century was certainly, as Richard mentioned, this period of very strong economic growth. But you also had, you know, this interesting world, that I think David alluded to, where it wasn't such a great time to be a woman.

10:13:09

WINSHIPWe had this idea that a single male breadwinner should be able to support a family on his own. And because of that, for a long time, we actually overpaid men, in some sense, in order to prop up this kind of patriarchal world. And so part of what's happened since then, that's made people feel like they're not doing as well, is that as women have -- as married women have increasingly entered the workforce since the mid-20th century, you've seen them experience very strong pay gains.

10:13:42

WINSHIPBut men have seen this erosion of this kind of male bonus that they were paid for years. But, actually, as everyone's mentioned so far, mobility hasn't actually gotten worse. It's just that it's never been particularly great. And I think that's where we all agree.

10:14:00

REHMYou know, it's interesting, David Leonhardt, your colleague at The Times, Nicholas Kristof wrote a recent column. He said one delusion common among America's successful people is that they triumphed just because of hard work and intelligence. He goes on to say their big break came when they were born into middle class families who loved and nurtured them. He also said your destiny is determined in the womb. If you are born to a poor and single mother, you are likely to stay poor.

10:14:55

LEONHARDTYeah, that was a great column. He wrote it from his hometown of Yamhill, Ore. I think what is really hard to keep in mind are these two dueling ideas, which is birth is not -- does not determine your life, but it has a huge effect on your life. So it is possible to rise up. And those stories are so inspiring when you hear them and they happen. It is possible to fall out of the upper class.

10:15:19

LEONHARDTBut the effect that your station of birth has on you is so large. And I think it's larger than most Americans would probably be comfortable with. I think about my own experience. I was -- in middle school, I was a hyperactive kid, right? And the school came to my parents and said, we're really worried. David has these big problems. And my parents had the sort of skills and knowledge to say, we think he's a bored 12-year-old who's going through adolescence, right?

10:15:43

LEONHARDTThey didn't put me in some sort of program. And then my parents appealed my financial aid award to college twice, right? And they won both appeals. And you think about these things -- had I been another kid, had I not been the son of a school teacher and a copy editor who understood how to do these things, any one of those things could have kept me from going to college.

10:16:03

LEONHARDTAnd so your background has a huge effect on you. And that -- I didn't get to go to college because I was brilliant. I got to go to college, sure, because I worked hard, but because my parents had the ability to do those things. And many, many other kids, who worked no less hard than me, didn't have that advantage. And that's so important to keep in mind.

10:16:21

REHMRichard?

10:16:21

REEVESSo James Heckman, the economist, says that the biggest mistake you can make is choosing the wrong parents.

10:16:27

LEONHARDTYes.

10:16:27

REEVESBut I agree with, I think, David and Scott, that we need to be careful not to fall into the trap of fatalism, you know -- it's determined -- there's nothing we can do -- and naivete, which is to imagine that somehow people can just spring free of the circumstances of their birth. I think your question points to something quite important in this debate, which is, if you like the kind of -- the difficult side of meritocracy, right, the idea of meritocracy. And when it can be quite difficult is the people who are successful like to think they're successful on their own merit.

10:16:59

REEVESIt is very difficult for them personally to admit that it was partly a result of their own advantages. And so I think that's why it's so difficult to accept this evidence that America is not the land of opportunity we think it is because it poses not only an existential crisis for the nation but for lots of individuals as well. And those who do make it really -- it's very reassuring for them to think that they've made it, you know, through their own grit and talent.

10:17:20

REEVESBut if that's not true, that actually poses quite a big threat. And I think that's been part of the political obstacle here, kind of moving forward. And if you like, kind of just like alcoholism, recognizing you've got a problem is the first step. And I'm encouraged by the fact that across the political spectrum now there's a lot of consensus that America has a problem with upward mobility, and we need to do something about it.

10:17:39

REHMBut, you know, Kristof went on to say that people tend to be oblivious to their advantages and other's disadvantages. The result, he said, is mean-spiritedism, as in the political world, and a lack of empathy towards those struggling.

10:18:03

REEVESAnd I think that's the danger. And people forget that meritocracy, as a word, was actually a dystopia. It was from a British sociologist called Michael Young, who wrote a book about a meritocracy, warning against it. And the thing he was worried about was exactly that, was that if we convince ourselves that we live in a meritocracy, then it allows the affluent to convince themselves of their own superiority.

10:18:25

REEVESThat also means there's less compassion for those who haven't made it. Because if there is all this equal opportunity, then the only reason you can be poor is because of your own failings. And then you have a problem.

10:18:33

REHMRichard Reeves, he's with the Brookings Institution. His new essay, "Saving Horatio Alger," is having a link on our website.

10:20:00

REHMAnd one question that keeps coming up as we talk about upward mobility, and perhaps the lack thereof, in our society today, an email: "Don't a majority of wealthy people become so from inheritance status?" Scott Winship?

10:20:25

WINSHIPWell, I don't think that's actually true, and I think it's getting less true. Even the research of Emmanuel Saez and Thomas Piketty that's been all the rage the last couple of years shows that, in the United States, it's less and less true that inherited wealth is driving large fortunes. In places like France, it looks like inheritance is making a comeback.

10:20:47

WINSHIPSo, you know, I think there's a tendency to attribute a lot of very real inequalities of opportunity to income inequalities and wealth inequalities. And I think the thing we have to remember there is that economic inequalities do reflect more basic inequalities related to parental education, to parenting skills, to personalities, values and family structures.

10:21:11

WINSHIPAnd so I think what's unfortunate about the debate on inequality of opportunity and mobility the last few years is the extent to which it's focused on income and wealth inequality. And I think if we really are going to make headway on this problem, it's going to be actually a lot tougher than just redistributing income.

10:21:31

REHMBut if, as we do today, 1 percent, the top 1 percent holds what, 20 percent of the wealth. And, I mean, how can you not think about redistribution of wealth, Scott?

10:21:55

WINSHIPSure. Well, I mean, I think the empirical importance of income is really in question. There was a book written by Susan Mayer a decade ago called "What Money Can't Buy" that really argued that income was really a proxy for these other things that are harder to deal with. I mean, if you look at the evidence, I think it's interesting. There was this debate about the Great Gatsby curve in the last couple of years that showed that countries with more inequality have less economic mobility.

10:22:24

WINSHIPAnd what we've seen since then is actually that across U.S. states, labor markets, metropolitan areas, that statistical relationship is incredibly fragile. In some cases there is no relationship at all, even across countries. Research by Miles Corak, who's a Canadian economist that originated the Great Gatsby curve, now shows that Sweden and the United States, which have very different inequality levels, actually have the same relative mobility that Richard was speaking about.

10:22:53

REHMHmm. Hmm.

10:22:54

WINSHIPAnd so I think there's just not enough evidence to say that that's -- that income inequality is really where we ought to be placing all of our eggs.

10:23:03

REHMRichard.

10:23:04

REEVESSo Scott's right that there isn't a straightforward course or relationship between income inequality and lack of mobility. And I tend to agree with him on that. As far as wealth is concerned, we -- I think it is a bit too early to say. And that sounds like a cop-out, but actually we've seen the big wealth divides opening up in the last few decades. We haven't had time really for them to pass on in the kind of way that Piketty worries about. So the inherited effect of wealth may yet be seen.

10:23:31

REEVESOne of the reasons I worry about wealth is because it's a straightforward way not only to kind of pass money on -- that's obvious -- but also because having some capital can be very helpful at critical moments. So does it help you to get your kid away at college? Maybe they need a car. Maybe you can help them while they're doing a kind of low-pay job in the city or so on.

10:23:46

REEVESAnd we don't yet know whether that's happening, but I think that we're beginning to worry enough that actually having a bit of capital is helpful in some of the moving forward. Where Scott's right, I think, is that we can't just say it's all about income inequality or welfare inequality, particularly as the inequality has been driven at the top of the distribution rather than -- more than the bottom.

10:24:04

REEVESBut equally it's absurd, I think, to say that we can ignore the economics of it. So, you know, those on the right focus on family and culture and character, and they're right. And those on the left tend to focus on the problems that come with having lack of money. And they're also kind of right. They're both kind of half-right. And if we're serious about this, we kind of need to recognize that this is complex and that those forces, economic and social forces, interact with each other in ways that we're beginning to understand.

10:24:27

REHMExactly. David.

10:24:30

LEONHARDTThat's a nice summary. And I think one of the most interesting pieces of research on the subject, if not the most interesting piece of research, is by a team of academics at Berkeley and Harvard, including Raj Chetty. And what they looked at was rates of mobility in different parts of the United States. And what they found is that, in parts of the United States, mobility actually looks quite similar to the way it does...

10:24:50

REHMSuch as?

10:24:51

LEONHARDTSuch as the northeast, such as parts of Iowa and Utah, such as parts of the west coast. And in parts of the United States, mobility looks absolutely terrible, the old industrial Midwest, the southeast. So when I wrote about this research, I went down to Atlanta, but I could've gone to Detroit as well. And what's interesting about that work is, just as Richard was saying, is it provides evidence for both sides of the political debate.

10:25:17

LEONHARDTIncome inequality does matter. Places with a larger middle class tend to have higher rates of mobility, but so do things like family structure. Family isn't just -- the breakdown of family structure isn't just a cause of -- isn't just an effective inequality. It's a cause of inequality as well.

10:25:34

REHMAnd here's an email: "Is it true that there's a very low probability of being poor, however that's defined, if, number one, you graduate from high school and, number two, you marry before you have children?" Scott Winship?

10:25:58

WINSHIPWell, you know, the evidence couldn't be clearer that people who get more schooling and people who are married have more economic mobility than people who don't. I think it is a little complicated just because the people who marry are not sort of a random group, right? They have a lot of other advantages. They themselves have more education. And I think, you know, what we've seen when we've tried to actually promote marriage through social policies, particularly during the welfare reforms of the 1990s, is that we have no idea how to do that.

10:26:36

WINSHIPAnd in fact, you know, it may be that rather than trying to convince people who find themselves unexpectedly expecting, rather than convincing them that they ought to marry, it's probably going to be a more effective strategy to try to reduce the number of early unplanned births to begin with. And certainly, you know, getting a college education is only going to become more and more important. What's interesting though is that over time people have increased their educational attainment. And that's partly the reason that mobility actually hasn't fallen as education has become more important.

10:27:10

REHMRichard Reeves, in your delving into this subject, what conclusion did you come to about income inequality and its effect on American society as a whole?

10:27:31

REEVESI think it's really important to be clear which kind of inequality we're most worried about. And in the debate about inequality, they're even going to get mixed up. So there are a lot of people who are just worried about the gap between the rich and the rest actually. It's no longer between so much rich and poor but the pulling away of the rich. And you may well worry about that for lots of different reasons.

10:27:49

REEVESBut what we shouldn't do is conflate that with the kind of inequality that I'm most worried about, which is the inequality of opportunity that exists, and particularly the stickiness at the bottom of the income distribution, so the chances of kind of not being poor just because your parents were poor. And the connection between those two is complex. We're still trying to figure out how it works. And the truth is that other factors like the quality of your schooling, the kind of neighborhood you grow up in, family stability and so on will count for as much as some of those economic factors as well.

10:28:17

REEVESAnd so where I end up with this kind of thing, I think you can turn this into so that it becomes a theological debate, right, using matrices and statistics and regressions and so on which is, can we show definitively that more income inequality relates to more social mobility or less? No. But then there's a danger. We're dancing on the head of a pin.

10:28:22

REHMMm hmm.

10:28:36

REEVESLet's just take a step back here and say, we do have pretty high levels of income inequality in the U.S. Some people don't mind, some people do. We also have pretty low levels of social mobility in the U.S. And a lot of people mind about that. It seems to me what you can't really do is have both. It's very difficult to sustain a society where there's a big gap between rich and poor and less chance of moving between rich and poor. So it's a toxic combination regardless of whether or not they are directly causally related.

10:28:59

REHMWhat do you mean by toxic?

10:29:03

REEVESWhat I mean is that you can imagine a society where there's quite big gaps between the rich and everybody else, kind of rich and poor, but lots of mobility between them. And you can look at yourself in the mirror and say, OK, we have quite big gaps, but, you know what, there's lots of opportunity to move around, OK. I can live with that. You can also imagine the society where maybe there's not so much mobility. It's actually quite hard to move up and down, but we redistribute quite heavily.

10:29:23

REEVESSo, in a sense, you compensate the losers in that race quite strongly and make sure that the winners don't get too far ahead. You could look at yourself in the mirror and say, OK, we can kind of live with that. It's very hard to look at yourself in the mirror and say, here's a society where there's a pretty big gap between the winners and the losers in economic terms.

10:29:38

REEVESOh, and, by the way, it's quite hard to switch between the two. That seems to me to go to the heart of the problem. So rather than worrying about empirical studies of causality, let's just look at the overall situation and say, this isn't acceptable. And in America at least, the solution's going to lie more on the side of promoting opportunity than redistributing income and wealth.

10:29:56

REHMAnd what you write in your piece is that lack of upward mobility is souring the national mood. As horizons shrink, anger rises.

10:30:14

REEVESYeah, I think that's right. And I think there's two things happening at once. I think that we're seeing less economic growth. We're seeing -- you know, people are just not getting better off as quickly as they were before and at the same time a growing realization that actually this idea that you can kind of move up the ladder is less true than it used to be. And that's a very, very difficult combination.

10:30:33

REEVESSo maybe whenever -- when the tide was rising and most people were getting better off, it didn't matter quite so much politically or psychologically if there wasn't as much movement up and down the ladder. But actually if there isn't as much growth overall, if we're not all getting better off at the same rate, and suddenly it starts to feel a bit more like a zero sum game.

10:30:49

REEVESIt's the difference between being on a highway, if you're going 60 miles an hour and someone overtakes you, you don't mind so much. If everyone's stuck in gridlock, you really hate it when someone cuts in and gets ahead of you. And so it kind of creates more friction. And I think that explains some of the kind of anger that we see at the moment.

10:31:04

REHMAnd what about the anger in Missouri, in Ferguson, Mo., David?

10:31:11

LEONHARDTYeah, I think that is mostly about race, but race is connected to this. If you look at the gaps between black and white, it's mostly a depressing story. A lot of gaps are shrunk in this country over the last 30 years, gaps between men and women, gaps between non-Hispanics and Hispanics. But gaps between whites and blacks on thing like income, on things like wealth, on things like unemployment, some of them haven't shrunk at all. Some of them have widened a little bit. Some of them have shrunk somewhat. But it's basically -- it's a worrisome story. And so I think what you see in Ferguson -- I mean, there's a lot going on in Ferguson, right.

10:31:45

REHMOf course.

10:31:46

LEONHARDTBut I think the backdrop to it is exactly what Richard was saying, which is we have an economy that is growing slowly. And you have a lot of frustration, particularly about what it's like to be African-American in this society, when the pie isn't growing very quickly and when the share that African-Americans have is smaller than the share that most other groups have.

10:32:06

REHMScott Winship.

10:32:08

WINSHIPSo I do think it's a little bit dangerous to extrapolate from what's going on in Ferguson to broader feelings about opportunity. And I also think it's really easy to overstate how anxious and pessimistic people are. You know, there are a number of reports that I've seen lately that talk about how people think that the next generation is not going to have as much opportunity as the current one. What's interesting about that though is that you get very different responses when you ask people about the next generation and the general sense versus if you ask people about their own children.

10:32:40

WINSHIPAnd when I was at the Economic Mobility Project in 2009, kind of the bottom of the recession, we asked people two different questions. We asked them whether -- we asked parents whether they think their own children are going to have a better standard of living than they do. And we asked nonparents whether they thought the next generation, kids today, were going to have a better standard of living.

10:33:02

WINSHIPAnd interestingly, you know, 62 percent of parents think their own kids are going to be better off than they are, whereas among the non-parents only about 40 percent thought that kids today would be better off. So I do think that we saw a lot of concern about inequality during the recession because of the recession, how deep it was. But even then, you know, this was never a big enough concern that Occupy Wall Street became, you know, anything as big as what the Tea Party became.

10:33:29

REHMAnd you're listening to "The Diane Rehm Show." Why is it that poverty seems to be growing most quickly in the suburbs? Do we have any idea of that?

10:33:46

REEVESI have Brookings colleagues who work on this. Elizabeth Newburn (sp?) in particular works on this all the time. So you should have her on to talk about that specific problem. But I think it's -- my understanding -- but it's partly because in the past there was just much more concentration of poverty and so -- and there's just been a little bit of kind of leaking out of poverty into other areas.

10:34:04

REEVESAnd so some suburbs, certainly not all, are becoming slightly more mixed in terms of their economics. And so it's harder just point to poor places now. I mean, actually I think that has quite big implications for policy as well. You just kind of follow poor people to where they are or where they used to be.

10:34:19

LEONHARDTIt's a mix of bad news and good news. The bad news is we have a -- we've had a relatively slow-growing economy now for 15 years. And we have high inequality which exacerbates poverty in all kinds of places. The good news is our cities have actually become much more pleasant places over the last 15 years, 20 years. And as a result, they're more expensive. And as a result, the place where, if you are low income, you're more likely to go are the suburbs.

10:34:43

LEONHARDTAnd one manifestation of that is, if you want to eat some of the best ethnic food at authentic restaurants, you go to the suburbs now. You don't go to the city. Here in Washington, you go to Rockville, Md. You don't go to Chinatown to eat real Chinese food. And that's sort of because living in Washington Proper is too expensive for people at the lower end of the spectrum. And so some of it's bad news, but some of it is actually welcome news about how cities are doing.

10:35:08

REHMScott.

10:35:09

WINSHIPIt's important to remember, too, I think, when people think about suburbs, they -- a lot of times, we still have this outdated idea of kind of, you know, white picket fences and big houses. A lot of suburbs are places like East St. Louis which makes Ferguson look pretty well off actually, places like Camden, N.J. So in some ways, we've always had some suburban poverty, and it's getting worse in those places as people flee the most dangerous urban neighborhoods.

10:35:40

REEVESIt's also worth saying, the most affluent neighborhoods and suburbs are more economically segregated than they were. So whilst there is more poverty in some suburbs, there's also more separation of the most affluent. So we're not talking -- there are suburbs and there are suburbs.

10:35:54

REHMWhat about the changing makeup of the family, David? Single parenthood, for example, to what extent does that play into whether one becomes or has access to mobility?

10:36:19

LEONHARDTThis is an enormously fraught subject because, whenever you talk about it, you seem as if you are making some sort of moral judgments, right. It takes us back to the Murphy Brown debate with Dan Quayle from the early 1990s. So what I'm about to say is not to say that there is something morally wrong with single parenthood at all. I have enormous regard for people who are bringing up kids alone. It's incredibly difficult.

10:36:43

LEONHARDTI do think the research suggests that the outcome of kids in single-parent families, when you try to control for other things is not as good on average as the outcome of kids in families with two parents. There's some indication it's particularly problematic for boys. This is a field that we're still going to have to find out more about to be sure.

10:37:04

LEONHARDTI'd welcome Scott's and Richard's thoughts about this. But I think in general, as Scott said, we don't know how to encourage marriage from a policy perspective. But I do think we should be worried about the rise of single parenthood particularly low income.

10:37:15

REHMDavid Leonhardt, he's editor of The Upshot, a New York Times website covering politics and policy. He's author of the eBook "Here's the Deal: How Washington Can Solve the Deficit and Spur Growth." Short break, right back.

10:39:58

REHMAnd it's time to open the phones. We'll go first to Kokomo, Ind. Hi there, Renee. You're on the air.

10:40:09

RENEEHi, Diane. Thank you so much for taking my call.

10:40:11

REHMSurely.

10:40:13

RENEEI was born to a single mother, always lived in government housing, you know, government-assisted apartments. We had a very, very slim budget, you know, didn't have money for new clothes, new shoes, nice cars. And I always kind of felt -- like, I would look at my classmates and my peers around me and think, what is the difference? Why do they have more than what I have? And I realized that I was going to have to get an education when I got older. And I was going to have to work hard if I wanted those things. And that's what I did. I went to -- Indiana University has a branch in Kokomo. And I went there. And I'm now a registered nurse.

10:41:00

REHMGood for you.

10:41:01

RENEEYou know -- thank you. I've been a homeowner for eight years. I drive a brand-new car. I have nice things. I'm able to take vacations. And I think what it really boiled down to for me was my passion for wanting to get out of poverty, not being satisfied with not having money for things. And as much as I loved my mother, I knew that that was the life that I did not want for myself.

10:41:26

REHMInteresting. Richard Reeves.

10:41:27

REEVESMm. Well, this is a great story, Renee. Thank you. And it helps us against the fatalism case, right? We should not assume that people do not move up and that they don't escape. By the way, nursing has proved to be an incredibly pro-mobility profession. A lot of people who are nurses are people who have moved up.

10:41:43

REEVESSo it'd be interesting to see how healthcare reforms influence that, so -- but all I'll say is congratulations to Renee. It'd be real interesting to understand what it was about her and how she developed those kind of aspirations and so on to kind of move on out, to see whether or not other people can learn from that 'cause the truth is that, for most people in her circumstances, she's the exception that proves the rule which in no way undermines her achievements.

10:42:03

REHMExactly. Yeah.

10:42:07

REEVESBut it does mean that we shouldn't say, oh, great, Renee's done it, so presumably everyone can do it.

10:42:11

REHMWhat about college graduates, their relationship to marriage and divorce? David Leonhardt.

10:42:19

LEONHARDTSo we have this fascinating marriage gap opening up in our society in which divorce rates for college graduates have actually fallen, and marriage rates are very high. And so this idea that divorce was on an ever-rising trend was just wrong. And so we now see among college graduates very high marriage rates, relatively low divorce rates. And one, it seems, driver of inequality is the fact that college graduates by and large get married and stay married -- not universally but by and large -- and a lot of people who don't have college educations never get married.

10:42:56

REHMNow, isn't the divorce rate still about one in every two marriages?

10:43:05

LEONHARDTNo. So if you were to look at -- and I don't have the numbers off the top of my head. But they're well shy of one out of every two. If you were to look at people who got married in the year 2000, for example, particularly among college graduates, the rates are much lower than one in two. Richard's colleague, Justin Wolfers at Brookings, has done some of the best research on this.

10:43:22

REEVESMm. Well, one of the things that strikes me -- America's my new home, but moving from Europe is this is exactly this gap, is that you do see high rates of single parenthood at the bottom of the income distribution. But you also see marriage being reinvented, as David says, at the top. And it's not just college graduates getting married and staying married and raising their kids but also college graduates marrying college graduates.

10:43:43

REEVESAnd, you know what, two degrees are better than one. Two breadwinners are better than one. Two parents are better than one. And that's not to make any kind of moral judgments other than the fact that that's just an easier way to kind of raise your kids.

10:43:52

REHMThat's how it is. Scott Winship.

10:43:56

WINSHIPSo I think I'm going to argue counter to type and point out again that, you know, in a lot of ways, I think we're sort of looking for magic bullets, whether it's income inequality, whether it's encouraging people to get married. And I think the reality unfortunately is that a lot of times it really is the harder to address personal inequalities that are really the things that we've got to figure out.

10:44:19

WINSHIPSo I think of a show like MTV's "16 and Pregnant," for instance, which I think probably a lot of your viewers have seen, where, you know, it's far from clear that the basic problem there is that people just need to marry these guys who got them pregnant or that we need to give their families more money, right?

10:44:38

WINSHIPYou actually see kind of a lot of the really difficult multigenerational problems that a lot of these kids face and the lack of hope that they have for their futures. So I certainly think all the signs point towards family structure being important. But I think we also ought to keep in mind that if we just sort of got all of these non-college graduates to marry that that would take care of everything, I think, is probably also overly optimistic.

10:45:04

10:45:11

ELLENHi. Thank you so much for taking my call.

10:45:13

REHMSure.

10:45:13

ELLENI think your panelists have raised some fascinating points, and I agree with many of them. But what struck me at the onset was, when talking about mobility and single parents and the effects of that family situation, two of our recent presidents were the products of single mothers, one of whom was raised in Arkansas, not known for its -- well, for mobility, and that I am strongly of the premise -- or I believe strongly in the premise that you can have social mobility.

10:45:46

ELLENAs your previous caller pointed out, education is the key. And libraries are free. We're not all subject to the same level of education, and we can't all go to Princeton. But we can read a book, and we can chart a path to get us to where we're going.

10:46:00

REHMInteresting points, Richard.

10:46:03

REEVESYeah. The main character in Horatio Alger's most famous book is told, poverty's no bar in this country. Buy your books, my lad, and kind of move on. So no one's disputing, I think, here that education is hugely important. But it's also the case that access to, first of all, the most -- the earliest education from your parents -- I agree with Scott. We're not going to promote marriage, but we could help people through more access to contraception and so on to plan births, you know.

10:46:27

REEVESAnd that tends not to be something that the right will support. Early years education, the quality of your K through 12, there are enormous gaps in K through 12 education equality. And so it's absolutely right that education is hugely important, which is one of the reasons why the affluent do such an amazing job of getting their kids into the best schools 'cause they know it, right?

10:46:42

REHMMm hmm.

10:46:43

REEVESThey -- we all know that. And so no one's arguing it isn't important. What we're saying is that there is not a level playing field here at all in terms of access to quality education from birth through to the end of college. There are huge gaps by income and by parental background in access to and use of education.

10:47:00

REHMDavid, you mention that there are regions in the country where, you know, poverty and inability to move upward is even more exaggerated than in other places. What about immigrant groups in America which have been able to find greater success than others?

10:47:26

LEONHARDTThere is a huge academic debate about this subject, and you could devote a whole show to it. In fact, I think it would be a great show. But my reading of the evidence is that by and large our largest immigrant group, which today are Latinos, which obviously describes people coming from many different countries, are following a path that looks quite similar to the path of earlier generations of immigrants, which is they're doing quite well. They come here quite poor. They come here with relatively low education, and the next generation does a lot better. And so I think the immigration story, the immigrant story, actually continues to be mostly a good news story.

10:48:04

REHMAnd what about Asians?

10:48:06

LEONHARDTAsian immigrants are doing extremely well. Now, again, there's a lot of diversity within Asian immigrant groups. Not all groups are doing well. This notion that all Asian immigrants are thriving is no more true than the notion that all Jews are rich, right? There are poor struggling Asian groups. But by and large Asian-Americans are also doing very well.

10:48:25

REHMAll right. So now we come to the crux of the matter. How do we as a society create more upward mobility? Richard.

10:48:39

REEVESSo I think the first thing to say is that whilst we've talked quite a bit in the last few minutes on family structure and family formation that, if you like, the soft infrastructure of inequality, the kind of hard infrastructure, which is access to decent quality education, good quality teachers, pre-K, grants that work to get people a way to college, et cetera, those are, A, at least as important, and, B, perhaps somewhat more within our control if we're interested in public policy and some of those softer things that Scott rightly points to.

10:49:09

REEVESAnd so -- and also, I think that the wealth debate may be less a debate about is it unacceptable level of inequality and more is that an amenable thing to tax, right? So, according to a calculation that I did with some colleagues for the essay, if we just took the estate tax down to the level it was under the first Bush president, we'd have enough money to pay for universal pre-K twice over, right? So this is an illustration.

10:49:29

REEVESIt's like a kind of thought experiment. And it seems to me that quality pre-K, closing some of the gaps in K-12, paying teachers who are in the most struggling schools a lot more, there's some evidence that that can begin to pull in kind of quality teachers. They're kind of bread and butter public policy issues, but critically, those are about providing services as much as cash. So they're not redistributing money by and large.

10:49:51

REEVESThey're providing services. And they are absolutely focused on breaking the link between parental poverty and child poverty and getting at that connection. And that's a very difficult choice for policy makers. It's easier in some ways to kind of redistribute money, actually harder to put in place public policies that really get at that gap. I've mentioned a few. There are many more.

10:50:09

REHMScott Winship.

10:50:11

WINSHIPWell, I think I've, you know, tried to emphasize I think we only have a limited sense of what factors are important in explaining limited mobility. And we certainly only have a limited sense of what policies actually expand opportunity. I think even something like pre-K, you know, the jury's really still out about whether kind of pre-K scaled nationally can really have a big impact. I think though what we shouldn't do is throw up our hands and just lament that there's nothing to be done.

10:50:37

WINSHIPWhat I've argued is that we ought to be experimenting at the federal level with interventions, evaluating them rigorously, expanding funding for those that work, and then ruthlessly cutting those that don't work. So whether it's (unintelligible) programs that promote work, delaying family formation, providing early childhood education services, I think we just have to try a range of things but be much more hardheaded about what works and what doesn't.

10:51:04

REHMIs the jury still out on assistance for pre-K and bolstering that assistance?

10:51:13

LEONHARDTI do not think the jury is still out on whether pre-K is important and has a huge role in boosting mobility. And I think realistically the only way you're going to have pre-K and good elementary schools for lower income kids and middle income kids is through government spending, which is to say taxes. Having said that, there are a huge number of pre-K programs and schools in general that are not performing well.

10:51:37

LEONHARDTAnd so sometimes when you look at these studies that find a program isn't working, that doesn't mean that pre-K doesn't matter, right? What it means is that we have a lot of pre-K programs that aren't doing well enough. And we, as Scott suggested, should actually be fairly ruthless about saying, hey, we're not going to spend a lot of money on programs that don't actually help kids.

10:51:58

REHMNow, Richard, you have said several times you're new to this country. What does your upbringing in your own country of origin tell you as you come here and view pretty much as an outsider what's going on here?

10:52:21

REEVESYes. Well, as you say, I'm an outsider although this is my new home. I have an American wife and American kids. And I went to the trouble to be born on the fourth of July, so (unintelligible).

10:52:32

REEVESAnd we've actually mentioned some of the things that have really kind of struck me, some of these family divides. I think that the race divide in particular, the black-white divide in mobility, is something that kind of the more you look at, the kind of more difficult it looks, the more challenging, that is, I think, can come in here. But, for me...

10:52:49

REHMDifferent from your own country?

10:52:51

REEVESYeah. The gaps in -- and many of the dimensions that we've kind of talked about between black Americans and white Americans are bigger than, I think, in most comparable European countries. And the mobility figures in particular are very, very startling and difficult. So those are some of the things that have occurred to me. But, really, it's almost like going back to try and understand why this ideal is so important to America, right? So my basic view is that in most of Europe, having more upward mobility and more -- yeah, it's great. It's nice to have.

10:53:24

REEVESIt's like the icing on the cake. But it doesn't go to the heart of what it means to be British or French or German or what -- in the same way that it does for Americans, which is why I think that the data we've just been talking about poses such -- is such an existential crisis for America. And that's not going away. It's right there from the beginning that actually this Horatio Alger American dream idea is central to the idea of America itself.

10:53:46

REHMAnd you're listening to "The Diane Rehm Show." Scott Winship, should we give up on that Horatio Alger idea?

10:53:57

WINSHIPAbsolutely not. I mean, that's what makes America America, I think, is this faith in that the next generation is going to be better off. I think there's a lot of reason to think that that remains the case. And part of the research program that I have is to try to counter some of the pessimism that I think we tend to hear too often. The middle class actually is -- and the poor are actually quite a bit better off in real terms than they were before the Reagan administration, for instance.

10:54:26

WINSHIPIt remains the case that over 80 percent of adults today are better off than their parents were. We have this stubborn problem of limited upward mobility from the bottom, and we've got too much poverty. And I think that's really where we need to focus our energies. And it is -- the dream, you know, remains too much of a dream, I think, for some people.

10:54:46

REHMWhat about tax structure?

10:54:49

WINSHIPWell, I mean, so with taxes, I think there are a couple of issues. The -- if we raise the estate tax, for instance, a big issue is how much of that revenue would actually make its way to federal coffers, right? Wealthy people would respond by finding ways to give their money to their heirs before they die. And then the second issue is, you know, what would we spend that extra money on? And would that be effective at increasing mobility?

10:55:12

WINSHIPAnd I think that is a huge open question. We've spent today at the federal and state level combined, we spend close to a trillion dollars on anti-poverty programs. That's way more -- something like six times more -- than we spent at the start of the war on poverty. And as we said, you know, upward mobility hasn't increased. So I am all in favor of spending more to try to discover interventions that work. But I do think we've got to be really hardheaded about it.

10:55:38

REHMDavid.

10:55:39

LEONHARDTNarrowly on the estate tax, I do think when you raise the estate tax, you get more tax revenue. That's why rich people are opposed to it because they aren't able to get out of it all. I think, more broadly, I think the main reason why we should be concerned about issues of upward mobility have to do with fairness and our sense of national identity. But there is a second one, too, which is we are wasting a huge amount of talent in this country. There are enormously talented poor kids who are never able to go to college, and that hurts not just those kids but the country as a whole. Maybe those kids would cure cancer, and they're never going to go to college.

10:56:08

REHMDavid Leonhardt of The New York Times, Richard Reeves of the Brookings Institution -- his essay, "Saving Horatio Alger," there's a link to it on our website, drshow.org -- Scott Winship at the Manhattan Institute for Policy Research, thank you all so much.

10:56:33

LEONHARDTThank you, Diane.

10:56:34

REEVESThank you.

10:56:34

WINSHIPThanks, Diane.

10:56:35

REHMAnd thanks for listening, all. I'm Diane Rehm.

10:56:38

ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Denise Couture, Susan Casey, Rebecca Kaufman, Lisa Dunn, Danielle Knight, Alison Brody, and Alexandra Botti. The engineer is Timothy Olmstead. Natalie Yuravlivker answers the phones. Visit drshow.org for audio archives, transcripts and podcasts. Call 202-885-1200 for more information. Our email address is drshow@wamu.org, and we're on Facebook and Twitter. This program comes to you from American University in Washington, D.C. This is NPR.

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